HCFA announces plans to roll out its provider plus’ option


HHBR Washington Correspondent

WASHINGTON – The Health Care Financing Administration’s (HCFA; Baltimore) Tim Hill told home health providers at the National Association for Home Care’s (Washington) policy conference last week that the agency is anxious for the industry’s input into a novel "provider plus" designation for home health agencies. The designation would be designed to improve payment and communications between agencies and Medicare’s fiscal intermediaries, Hill said.

According to Hill, the new designation would establish a set of standards and activities for home health agencies that are one step beyond the current regulatory requirements with the underlying goal of distinguishing the vast majority of agencies that bill Medicare appropriately from unscrupulous providers.

Hill said the new designation might take into consideration such factors as the existence of a voluntary compliance plan or other self-assessment tool. He said HCFA’s goal is to generate a mechanism to demonstrate appropriate billing practices and that agencies that satisfied the requirement would be rewarded with fewer medical reviews and other audits.

"It is very complicated right now conceptually," he said. "We need some feedback, and we are hoping the feedback we get from this and other industry groups will help us crystallize the concept to make it operational and clearly articulated."

Ann Howard, executive director of the American Federation of Homecare Providers (Washington), called the proposal promising. "Right now, they have a contractor system that is irrational and vindictive that is just not working," she said. "My members are very enthusiastic about this concept."

Howard noted that the new program would be administered by someone other than the intermediaries. "Presumably, that would lead to a different kind of relationship with contractors, and home health agencies would be paid on a regular basis," she added. "It would be a very different kind of relationship from the very adversarial one that currently exists between intermediaries and providers."

Surety bonds

Hill also told attendees of the conference that HCFA plans to issue its revised proposed rule on surety bonds this fall. The agency’s regulatory development of the surety bond requirement was placed on hold pending assessment from the General Accounting Office (GAO; Washington). Hill noted that the GAO report released last year included numerous recommendations with respect to the amount of the bond and its application and implementation.

"By and large, we support and concur with those recommendations, with the exception of those items that we would need a statutory change to implement," he reported. "We are now in the process of revising the regulation to conform to those comments."

Provider enrollment

According to Hill, HCFA is also developing a proposed rule for its provider enrollment activities that includes the requirements that must be met in order to acquire a billing number for the Medicare program. "It is relatively bare bones in that it articulates statutory authorities we already have," he explained. "We are not trying to reach beyond those items that we clearly have authority to collect and those pieces of information we need to have to enroll people in the program."

Hill said the agency anticipates publishing that regulation later this spring. Coinciding with that regulation will be revised provider enrollment forms, he added. Hill said those forms will be designed to balance the need to ensure integrity of providers with administrative needs. "There have been many complaints about the forms, as well as the people handling those forms at carriers and intermediaries," he said.

Medicare fee-for-service error rate

Hill said that HCFA is also working to establish mechanisms to gauge the Medicare billing rate more accurately. Currently, the primary measure of Medicare claims payment is the Department of Health and Human Services’ (Washington) Office of the Inspector General’s (OIG) annual audit of financial statements, which includes the calculation of the fee-for-service estimate.

"The good news is that the error rate has dropped about 50% in the last two years," he said. "The bad news is that from last year to this year, the error rate essentially remained unchanged." In fact, the error rate went up almost 1% from 7.1% to 7.9%, he noted.

"We have locked in the gains that we made in the last couple years," Hill said. "But it looks like we are hitting a point where we are flat, and we need to take some corrective actions to get the error rate down."

According to Hill, however, the OIG’s error rate is only a gross estimate of claims paid inappropriately because it is developed at the national level and is not specific by benefit category. To improve on that, he said, HCFA is implementing an error-rate testing program for its Medicare contractors that is much more specific. "This summer, we are going to start testing each contractor and have a process in place to measure and assess the errors that people are making," he reported.

Hill said HCFA plans to examine both paid and denied claims instead of only paid claims as the OIG does. "We are going to look at what the contractor does in terms of paying claims and denying claims to give us a better picture of how the program is operating," he said.

Hill said this will help generate a fairly rigorous database with a set of narrative descriptions about the types of errors that HCFA sees in every region by every benefit category. "We are also going to be very active in describing what is in this database to provider groups," he added.

Hill said the vast majority of these errors are easily correctable. "The two errors that we see most often are plans of treatment not being signed and dated, and absence of documentation for skilled care in excess of three weeks," he explained. But he noted that when the OIG looks at these claims and determines that the documentation is insufficient, no judgment is made about whether the services were medically necessary.

"These are not difficult errors to correct," Hill argued. To remedy the problem, Hill said, HCFA is also meeting with home health industry representatives and hopes to communicate specific steps within a month to reduce these errors. In addition, he said the agency is working to revamp its own internal processes for contractor oversight.